Asia stocks gain after robust US growth report

AP News
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Posted: Oct 31, 2014 12:05 AM
Asia stocks gain after robust US growth report

SEOUL, South Korea (AP) — Asian stocks climbed Friday after strong U.S. economic growth and upbeat earnings sent Wall Street higher. The dollar continued to strengthen after the Fed signaled a rate hike earlier this week.

KEEPING SCORE: Japan's Nikkei 225 jumped 1.7 percent to 15,921.26 and Hong Kong's Hang Seng advanced 0.9 percent to 23,902.57. South Korea's Kospi inched up 0.1 percent to 1,960.34 and Australia's S&P/ASX 200 rose 0.5 percent to 5,505.60. Stocks in mainland China, India and Southeast Asia also rose.

US GROWTH: The U.S. economy expanded 3.5 percent in the July-September quarter from a year earlier, driven by solid gains in business investment, export sales and the biggest jump in military spending in five years. The figure was slightly above what economists expected. The world's largest economy continued its recovery from the previous quarter, when it expanded 4.6 percent. The growth figures were released after the Federal Reserve confirmed the end of its $4 trillion bond-buying program because the U.S. economy no longer needs as much assistance. It also signaled that an eventual interest rate hike is on the cards.

ANALYST'S TAKE: "It was good enough to remind investors that the early stages of rate increase cycles are usually good times for stock markets," Ric Spooner, chief market analyst at CMC Markets, said in a commentary. "As recent data releases have indicated, central banks begin to think about rate increase when growth is strong and corporate earnings are doing well."

JAPAN DOLDRUMS: Japan's inflation slipped and household spending fell in September while unemployment ticked up. Core inflation was at 3 percent, down from 3.1 percent in August while unemployment rose to 3.6 percent from 3.5 percent. Policymakers at Japan's central bank are holding a monetary policy meeting as the bank faces pressure to increase stimulus to support growth. But analysts are not expecting any immediate action from the central bank.

WALL STREET: The Standard & Poor's 500 gained 0.6 percent to close at 1,994.65. The Nasdaq composite rose 0.4 percent to 4,566.14. The Dow Jones industrial average surged 221.11 points, or 1.3 percent, to 17,195.42.

ENERGY: Benchmark U.S. oil was down 16 cents to $80.96 in electronic trading on the New York Mercantile Exchange. The contract dropped $1.08 to settle at $81.12 on Thursday. Brent crude, used to price oil in international markets, slipped 34 cents to $85.90 in London

CURRENCIES: The euro edged down to $1.2603 from $1.2607 late Thursday. The dollar rose to 109.36 yen from 109.34 yen.